How a Patent Moves
Chapter Seventy-Two
Syllabus topic 3.3, "Transfer of Patent Rights"
Pages 295 to 297 of 524
In one line
A patent is movable property, and like any other movable property it can be sold, given, mortgaged, licensed, inherited or taken by operation of law.
In the wording a student can write in an exam: by section 50(5) of the Patents Act, 1970 the rules of law applicable to the ownership and devolution of movable property generally apply in relation to patents, and by section 69(1) a person may become entitled to a patent or a share in it by assignment, transmission or operation of law, or entitled as a mortgagee, licensee or otherwise to any other interest in it.
Why the Act treats it as property at all
Because a right that cannot be sold is worth much less. An inventor who cannot transfer the patent must exploit it personally or not at all, and most inventors have no factory. The value of a patent to a small inventor lies almost entirely in the ability to sell or licence it.
And because investment needs security. A bank that lends against a patent needs to be able to take a charge over it, and section 69(1) contemplates a mortgagee's interest in terms.
The five ways a patent moves
One: assignment. A transfer of ownership, in whole or in part, by act of the parties. It may be of the whole patent, of an undivided share, or limited to a territory or a field. Chapter 870 works the practice.
Two: transmission. Devolution otherwise than by an ordinary assignment: on death to a legal representative, on the winding up of a company to its liquidator, on the amalgamation of two companies to the transferee.
Three: mortgage. The patent is transferred or charged as security for money, with a right of redemption. Section 69(1) names a mortgagee expressly.
Four: licence. Not a transfer of ownership at all, but a permission. The patentee remains the owner; the licensee gets consent, which is what section 48 makes the whole difference turn on. Chapters 750 and 760 work licences.
Five: operation of law. Vesting without an act of the parties: on insolvency, on a court's order, or by a statutory scheme of amalgamation. Section 69(1) names it.
Assignment against licence
| Assignment | Licence | |
|---|---|---|
| What passes | Ownership, in whole or in part | Permission only |
| Who is the patentee afterwards | The assignee, once registered | Still the licensor |
| Writing required | Yes, s.68 | Yes, s.68 |
| Registration | The assignee registers title, s.69(3)(a) | The licensee registers notice of interest, s.69(3)(b) |
| Right to sue | As patentee | Only an exclusive licensee, s.109; and a compulsory licensee, s.110 |
| Reversion | None | The rights revert when the licence ends |
| Worked in | chapters 730 and 870 | chapters 750, 760 and 880 |
The line matters most for the right to sue. An assignee sues as patentee. A licensee generally cannot sue at all, and the two exceptions are section 109 for an exclusive licensee and section 110 for a licensee under section 84. Chapters 760 and 1080 work them.
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